Argument Preview: US v. Atlantic Research on 4/23

The following argument preview is by Sarah Rispin, an attorney in Akin Gump’s DC office. Sarah participated in this case as counsel for the United Conference of Mayors, which submitted an amicus brief supporting respondent (see here).

The Court will hear argument tomorrow in No. 05-3152, United States v. Atlantic Research Corp., which presents the question whether owners of contaminated sites that must be cleaned up in accordance with the Comprehensive Emergency Response, Compensation and Liability Act (CERCLA) can recover clean-up costs from other potentially responsible parties (PRPs) before they are the subject of a state or federal enforcement action.

Thomas Hungar is arguing on behalf of petitioner United States, and Thomas Armstrong of Von Briesen & Roper is arguing on behalf of respondent Atlantic Research; additionally, Jay Geck, the Deputy Solicitor General of Washington State, will argue as amicus supporting respondent. Huron Valley Steel, Reading Company, and Cooper Industries (the petitioner in a predecessor case, Cooper Industries v. Aviall Services) have filed amicus briefs in support of the United States. Several governments, NGOs, industry associations, and corporations have filed as amici in support of Atlantic Research, including a group of 40 states, Washington D.C. and Puerto Rico, the United States Conference of Mayors, New York City, a group of former EPA officials that includes former Administrator Carol Browner, the Association of California Water Agencies et al., the Natural Resources Defense Council, Lockheed Martin, Ford, and GM. Washington State Attorney General Rob McKenna has been granted argument time to present the position of the States.

Atlantic Research retrofitted rocket motors on behalf of the Defense Department in an Arkansas plant during the 1980s. This work included removing rocket propellant fuel from the rocket motors, residue from which contaminated the site’s soil and groundwater. Atlantic Research voluntarily cleaned up the contamination in accordance with CERCLA and sought to recover its costs under both sections 107(a) (which assigns liability to four classes of PRPs, from which courts have implied a contribution right) and 113(f) (which was added to CERCLA in 1986 to provide an express right of contribution to PRPs against whom enforcement actions had been taken) of that Act. Although the United States initially negotiated with Atlantic Research about paying for some of the clean-up costs, negotiations broke down after the Supreme Court in 2004 held in Cooper Industries v. Aviall Services that section 113(f) did not afford a right of contribution to parties that cleaned up contaminated sites voluntarily. Atlantic Research then amended its complaint to seek recovery only under section 107(a) and federal common law. The United States then sought to dismiss the complaint, citing a pre-Aviall Eighth Circuit decision that interpreted section 113(f) as the exclusive remedy for parties, such as Atlantic Research, with no claim. The district court agreed and granted the motion to dismiss.

On appeal, the Eighth Circuit revisited its prior precedent in light of Cooper Industries, in which the Supreme Court had noted for the second time that sections 107(a) and 113(f) provided separate and distinct remedies for PRPs that remediated more than their equitable share of contaminated sites. The Eighth Circuit concluded that it no longer made sense to maintain its prior holding that section 113(f) provided the exclusive remedy for such parties; instead, it held that section 107(a) does indeed provide a pre-enforcement right of contribution. The United States petitioned for certiorari, which was granted in January of this year.

The arguments being made before the Court center on section 107(a)(1)-(4)(A)-(B), which explain some of what PRPs shall be liable for. These include:

(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan[.]

Before the Court, the United States argues that section 107(a) does not authorize PRPs to bring contribution actions against other PRPs when it provides that PRPs shall be liable for “any other necessary costs of response incurred by any other person.” Rather, the United States argues, because PRPs are the subject of the sentence, when it says that they can recover from “any other person,” “other” must exclude PRPs. Therefore, the United States argues, “any other person” only includes innocent private parties, and section 107(a) only thus supplies an implied cause of action for such innocent parties.

Atlantic Research and amici argue, in response, that this is a tortured reading of the grammar of section 107(a), which the Supreme Court and several lower courts have read to provide an implied cause of action for PRPs against other PRPs. Furthermore, unlike section 113(f), which explicitly limits the right of contribution to those against whom an enforcement action or civil action has already been brought, section 107(a)’s implied contribution right is not limited to a certain point in the process. Therefore, section 107(a) provides an unlimited contribution right to parties who have incurred “necessary costs of response . . . consistent with the [CERCLA] national contingency plan.”

The government, NGO, and industry amici also weighed in with the policy argument that, in light of Cooper v. Aviall, CERCLA’s purpose of spurring the clean-up of contaminated sites around the country will be thwarted unless the Supreme Court reads section 107(a) to provide a pre-enforcement right of contribution: given the slow pace at which EPA has brought enforcement actions to force the clean-up of contaminated sites (clearing up a few hundred each year), it will take hundreds of years to clean up the hundreds of thousands of contaminated sites sitting unused in the United States without voluntary cleanups. And given the prohibitive cost of remediation (generally running into at least the low millions of dollars for each site), voluntary clean-ups will not occur unless PRPs undertaking those clean-ups can recover from other PRPs.

As indicated by the large number of parties filing amicus briefs in the case, many eyes will be on tomorrow’s argument. This is a rare case in which industry and environmentalists hope for the same outcome, because interpreting section 107(a) to allow a pre-enforcement contribution right would both spur voluntary clean-ups and allow owners of contaminated sites to remediate, gain beneficial value from the sites, and settle outstanding liability issues that, as of now, linger on corporate accounting ledgers. Should the Supreme Court side with the United States, we can expect the focus to shift to Congress for a legislative solution.